Breakingviews - Blue Owl Offers Insight on the Challenges Facing Private Credit
Blue Owl's Market Struggles: Blue Owl Capital has seen its shares drop over 40% this year due to concerns over loose underwriting standards and the impact of U.S. tariffs, affecting publicly traded non-bank lenders.
Investment Fund Issues: The company is facing challenges with its business development companies (BDCs), as investors are moving away from its funds, leading to a significant discount on their net asset values.
Merger Plans: To address these issues, Blue Owl has announced plans to merge its BDCs and implement measures such as gating redemptions for OBDC II to stabilize its funds.
Concerns Over Future Risks: Despite not being directly affected by recent market collapses, there are growing worries about potential overheating in the private credit sector, particularly related to investments in artificial intelligence.
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Meta Platforms Poised to Surpass Alphabet in Ad Revenue
- Significant Revenue Growth: Meta reported a revenue of $59.9 billion in Q4 2023, marking a 24% year-over-year increase, and despite increased spending impacting margins, net income rose 9% to $22.8 billion, reflecting strong market demand and profitability.
- Optimistic Ad Revenue Outlook: Meta anticipates Q1 2024 revenue between $53.5 billion and $56.5 billion, representing a 30% year-over-year growth, which would be its fastest quarterly growth in five years, indicating a robust recovery in its advertising business and heightened market confidence.
- Competitive Advertising Advantage: Meta's advertising revenue reached $201 billion in 2025, with $196.2 billion derived from ads, and is projected to grow to $251.1 billion in 2026, potentially surpassing Alphabet's ad revenue soon, showcasing its strong competitive position in the advertising market.
- AI-Driven Growth: Meta has enhanced its advertising product conversion rates through AI technology, with CFO Susan Li noting that these improvements are driving strong growth, indicating that in the AI era, Meta's social media advertising model holds a significant advantage, likely positioning it to become the world's largest advertising business in the coming years.

Meta Platforms Forecasts $135 Billion Capex for AI in 2026
- Significant Revenue Growth: Meta Platforms reported a 24% year-over-year revenue increase to $59.9 billion for the quarter, with full-year revenue surpassing $200 billion, reflecting strong performance in its advertising and app businesses, thereby reinforcing its market leadership.
- Capex Forecast: The company anticipates capital expenditures to reach between $115 billion and $135 billion in 2026, representing a 73% increase from 2025, primarily driven by investments in Meta Superintelligence Labs and its core business, showcasing its strong commitment to the AI sector.
- Impact on AI Industry: The substantial increase in Meta's capex is likely to positively affect the AI industry, particularly benefiting partners like CoreWeave, which could enhance their market performance and accelerate the application and development of AI technologies.
- Positive Market Reaction: Following the earnings report, Meta's stock rose 8% in after-hours trading, indicating investor optimism regarding the company's growth potential, especially in light of accelerated AI investments, significantly boosting market confidence in its long-term strategy.






